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12 June 2012updated 08 Jul 2021 11:02am

On Labour’s manifesto, the row emerging isn’t about policy – it’s about how you pay for it

By Stephen Bush

Labour has launched its manifesto. The headline announcements? The nationalisation of rail, mail, parts of the energy and broadband industries, the undoing of cuts to legal aid, social care, health and education and more besides.

As far as the politics goes, the significant announcements, to my eyes, are on climate change, housing and the free movement of people. The first two are the areas that Remain voters consistently rank as their second- and third-order issues after Brexit, while the latter is a symbol of everything that Remainers fear losing after we leave the European Union. Getting the policy offer right on those is a vital prerequisite to reassembling Jeremy Corbyn’s 2017 electoral coalition.

On climate change, it is mission accomplished as far as the politics are concerned: the party has pledged that there will be no airport expansion as long as the party’s tests on noise pollution, air quality and climate change are not met. Since British airports in their current form do not meet those tests, this means goodnight for further airport expansion under a Labour government. Add that to the party’s target to reach net-zero by 2030 and you have a retail offer that meets the challenge from the Greens and the Liberal Democrats.

Under the hood, there are still plenty of holes: Labour’s manifesto is very far from actually being able to meet that 2030 target. The biggest advantage of that target is that it will very quickly become clear that in order to meet it, a step change that goes well beyond anything in this document is needed. But as far as the job of doorstep persuasion goes, Labour has ticked that box.

What about the free movement of people? Labour has removed its commitment to ending free movement after Brexit, which was pledged in its 2017 manifesto. While this opens up the possibility of a much softer Brexit end state, the party hasn’t quite committed to maintaining it either. In practice, it looks like Labour has decided to pay the electoral price of all but committing to the continued free movement of people, regardless of whether we Leave or Remain, but without trying to claim the political prize of matching the full-throated commitment to free movement displayed by the Liberal Democrats and Greens.

But the row emerging from the manifesto isn’t about policy, but how you pay for it. Labour has committed to running a surplus on day-to-day spending – under its fiscal rules, it can borrow freely for infrastructure, but new items of public spending have to be paid for. The party’s proposal is that this is funded by an increase in corporation tax and new income tax bands for people earning over £80,000 and £123,000 respectively.

There’s a policy question here, which is: can you actually get the amounts of revenue that Labour envisages in this manner? The Institute for Fiscal Studies doesn’t think so. But putting that to one side for a moment, let’s say Labour is right and the IFS is wrong. The party’s spending commitments are still inadequate to its aims – this is a party pledging to end in-work poverty, to be more than halfway to net zero, and to deliver a national education service by the end of its first term – it will need more tax rises if the rhetoric is going to be matched by reality. Take the expansion of lifelong learning and the introduction of free-at-the-point-of-use further education for all. Labour has allocated just £3.5bn to that policy commitment – suggesting a very low take-up on lifelong learning. Either the promise of widespread free adult education will be broken or the promise on taxation will be.

As I explain in my i column this week, a similar affliction plagues the Liberal Democrats. I think that, fairly or unfairly, the assumption that most make as far as the Liberal Democrats are concerned is that if their spending commitments exceed their revenue-raising measures, then the spending commitments will be chucked overboard. And I think that, fairly or unfairly, the assumption made by most about Labour is that if the choice is between breaking its promises on tax and on spending, Labour will keep its promises on spending and break its word on raising taxes.

The Conservatives think that remains the opposition’s major area of vulnerability, and that they can prevent any repeat of 2017 by warning that Corbyn’s manifesto comes with a hefty price tag. Labour’s calculation is twofold: the leadership thinks that its figures add up. Others will hope that even if voters believe that there are hidden tax rises, they will be ones that most of the public are willing to pay.

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